Many investors may not have heard of Eddy Elfenbein, but he’s worth paying attention to. Elfenbein runs an exchange-traded fund called Crossing Wall Street (NYSEARCA:CWS).Two things are interesting about Elfenbein’s Buy List, a group of picks that he releases each January. First, this year’s list contains some truly oddball stocks, including a company that makes industrial kitchen appliances and another that manufactures escalators. The second interesting thing about Elfenbein’s Buy List is that it has beaten the S&P 500 by 102% since its inception 17 years ago. The ETF run by Elfenbein holds a top five star rating from Morningstar and has doubled in price since its creation in 2016. Here are our seven top stock picks from Crossing Wall Street’s 2023 Buy List.
Silgan Holdings (SLGN)
There are no big tech names on Crossing Wall Street’s Buy List. Eddy Elfenbein seems to prefer old-economy companies that manufacture products which are necessary in our everyday lives. A perfect example of this approach can be found in Silgan Holdings (NYSE:SLGN), a Connecticut-based manufacturer of consumer-goods packaging. Specifically, Silgan is the top maker of metal food containers in North America.
While not cutting edge or exciting, Silgan Holdings is the type of well-run, low-key company whose stock consistently outperforms the market. So far in 2023, SLGN stock is up 5%. Over the past 12 months, the share price gained 24%. And looking out five years, the stock is up 95%.
A chart of Silgan’s stock shows a steady and relentless climb upwards. In business since 1987, Silgan Holdings has been consistently profitable since 2010.
Silgan Holdings’ dominance in a niche business, coupled with its immaculate balance sheet, is emblematic of the type of stocks Elfenbein has on his Buy List.
Trex Company (TREX)
Trex Company (NYSE:TREX) is the world’s largest manufacturer of decks made from substances other than wood. Its composite decks replace wood ones and are 95% manufactured from recycled materials. Trex decks are rising in popularity because they require little maintenance.
Unlike traditional wood decks and railings, Trex does not require any sanding, staining or refinishing. Trex’s decks also don’t rot over time like wood decks. In addition to consumers, a growing number of home builders in the U.S. and Canada are switching to Trex’s decks.
TREX stock had a difficult time in 2022. With higher interest rates cooling off the housing market and the home-renovation boom slowing down coming out of the pandemic, Trex’s share price fell nearly 40% last year.
However, it is rebounding strongly in 2023, up 25% in a little over a month. Over the long term, Trex’s stock has been a winner and gained 103% in the last five years.
Like a lot of stocks on Elfenbein’s Buy List, Trex tends to get little media attention and flies under the radar. But it is a solid performer for its shareholders.
Heico Corp. (NYSE:HEI) is another company that most investors have likely never heard of. Based in Hollywood, Florida, Heico specializes in making replacement parts for the airline industry. It’s definitely a niche business. The company also makes specialty parts and components for spacecraft, medical equipment, and telecommunications infrastructure. However, Heico’s bread-and-butter is as the largest independent provider of FAA-approved aircraft replacement parts to commercial airlines and the U.S. military.
In addition to its niche business and understated profile, Heico shares many other characteristics of the stocks on Eddy Elfenbein’s Buy List. These include strong earnings, a balance sheet that is as clean as a whistle, and a stock that has steadily trounced the broader market
HEI stock is already up 13% this year, has gained 24% over the last 12 months, and is up 186% in the past five years. Some financial websites have referred to Heico as a “genius stock” for investors to own, and one that very few people have on their radar.
Otis Worldwide (OTIS)
According to Elfenbein’s website, escalator manufacture Otis Worldwide (NYSE:OTIS) is the world’s leading elevator and escalator manufacturer, with more than 2 billion people using its products each day.
The company recently reported earnings and, as with most of the companies on Elfenbein’s Buy List, its fourth-quarter results were impressive. Otis Worldwide reported 2022 earnings per share (EPS) of 75 cents, which was better than the 73 cents expected, on average, by Wall Street analysts. Its Q4 revenue of $3.44 billion beat the mean estimate of $3.35 billion.
OTIS stock has gained 12% in the last three months . The stock has been flat over the past 12 months, but its share price has increased 84% since the company returned to public markets in 2020 after a hiatus.
How many other stocks that made their debut during the depths of the Covid-19 pandemic are up more than 80% today? Otis Worldwide’s dominance in a niche business is a recurring theme among Eddy Elfenbein’s stock picks.
Hershey Co. (HSY)
One of the few companies on Crossing Wall Street’s Buy List that investors are likely to be familiar with is chocolate maker Hershey Co. (NYSE:HSY). At first glance, the inclusion of Hershey seems like a bit of an anomaly, given that it is listed alongside a lot of industrial manufacturers. However, like most of the companies on Elfenbein’s Buy List, Hershey holds a dominant position in a niche market. In this case, the company’s niche is chocolate.
A going concern since 1894, Hershey’s business today is not that different from what it was 100 years ago. The Pennsylvania-based company makes chocolate and sells it at a profit.
The simplicity of the firm’s business model is one of Hershey’s greatest strengths. And Hershey remains the leading chocolate maker in the U.S. with a 25% market share.
HSY stock is another consistent winner, having climbed 4% so far this year, risen 16% in the last year, and gained 138% over the past five years.
Broadridge Financial (BR)
Alongside industrial manufacturers, Eddy Elfenbein seems to like the stocks of financial-data providers such as Broadridge Financial (NYSE:BR). Based in upstate New York, Broadridge Financial is a fintech company that runs proxy voting for investors. The little-known firm processes more than 2 billion investor communications each year. Broadridge’s communications are critically important to public companies, given that they concern annual reports, proxy votes, and other market-moving information.
While Broadridge Financial gets little attention in the business press, the company is quite large, as its annual revenues are approaching $5 billion and it has 13,000 employees.
The company’s earnings and growth over the past decade have been stellar and the stock has been a consistent outperformer. This year, BR stock is up 10%. The stock is flat over the last 12 months but has gained 60% during the past five years.
In addition to Broadridge Financial, Elfenbein also has on his Buy List other financial-services firms, such as FactSet Research (NYSE:FDS), Fiserv (NASDAQ:FISV) and Intercontinental Exchange (NYSE:ICE).
Carrier Global (CARR)
Florida-based Carrier Global (NYSE:CARR) is a leading HVAC company. It manufactures heating, ventilation, and air conditioning units, as well as some fire and security equipment. Not flashy, but Carrier Global’s stock has managed to provide long-term gains to Elfenbein. In the last five years, CARR stock has increased 245% to now trade at $44 a share. This year, the company’s share price has gained 6%.
Key to Carrier Global’s success has been its focus on both residential and commercial clients. The company has also partnered with Amazon (NASDAQ:AMZN) on a variety of cloud-based Software-as-a-Service (SaaS) security products. Like most of Elfenbein’s stock picks, Carrier Global tends to produce strong earnings, with its net income and earnings per share both rising more than 100% year-over-year for the third quarter of 2022. While CARR is an under-the-radar stock, analysts who cover Carrier Global give the company and its shares high marks.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.